Effect of Chinas Energy Technology on the United States - Research Paper Example

? China’s Energy Technology and How it Affects the United s Introduction The great recession has heralded the rise of a new economic power wherein China has catapulted past Japan to be the second largest economy(IMF, WEO 2009). Currently, it is breathing down hard on the neck of the United States threatening to grab the top spot that the United States has held on for so long. In fact, there is already a sharp contrast between the two powerhouse countries. Whereas the United States is heavily burdened by debt, China enjoys the distinction of having the most Gross International Reserves (GIR) Thus, in effect, the US has become the highest debtor while China has become the biggest creditor (Financial Ranks 2008). The Chinese economy have shown remarkable strength and resiliency throughout the economic crisis and has likewise shown significant strength when recovery started to set in. However, the United States remain shackled down by systemic risks since the crisis basically crippled the banking sector of the US. Among the positive contributors to the resiliency of the Chinese economy was the strong domestic demand that has been instrumental in ensuring consumption and therefore economic growth. This has been brought about by the fact that China has the highest population in the world which the Central Intelligence Agency (2011) estimates to about 1.3 billion. On the other end, the United States has over .3 billion which places it at the third spot over the world. Looking at the population alone, it is easy to surmise that these countries are also the most voracious energy consumers in the world. However, the recent acceleration of the Chinese economy has prompted the government to be more serious in tackling the energy demand of the country. This is a basic necessity since this is a basic requirement for continued economic growth. Hence, it has been a pressing concern for the Chinese to improve their capability to power their economy which includes renewable energy sources from the sun and the wind. Likewise, this has been instrumental in pushing China past the United States in terms of energy consumption (IEA, 2010). Main Body Economic recovery and Energy Sustainability The recovery of the global economy has been coupled by the increased arousal to the reality of global warming. Likewise, the fact that fossil fuels will eventually run out has been increasingly gaining traction on economic, social, political and even in military dialogues worldwide. As a matter of fact, world leaders have inked the Copenhagen agreement in order to lessen emissions from green house gases (World Energy Outlook, 2010). This is a significant agreement since the environmental symptoms of global warming has been growing more severe. Likewise, in order to ensure economic growth and stability, countries would do well to veer away from the traditional power source of fossil fuels. This has significantly boosted demand for renewable energy sources such as solar power and wind energy. More so, the economic growth of China has necessitated additional power producing capabilities. Over the last generation, China has increased its power output by about 53 gigawatts (gw) per year (Campbell 2011). Given the high population and the increasing investments to further grow their economy, China has really stepped up its efforts and investments in renewable energy. According to Wong (2010), China has been significantly pouring funds for renewable energy. Basically, the Chinese hopes to be ahead of the curve when it comes to generating new ways to harness renewable energy as well as to be able to make it available for consumption and actually making its economy able to utilize it. Furthermore, China has significantly moved away from the coal dependent economy that is, although growing industrially, manufactures only low value goods that are mainly dependent on labor. Nowadays, despite still being a predominantly agricultural economy, China has been re-cast as an advanced economy with an increasingly sophisticated economy coupled by the growth of intellectual workforce that has benefited much from the availability of education which has significantly increased the capability of its workforce to innovate (Wong, 2010 pp 4-5). Thus, over the past years, China has steadily improved its energy technology to support its expanding economy. The foregoing facts show how important investments in energy technology are to the economy. However, the recent economic downturn that hit the US and most major economies have significantly altered the global economic landscape giving rise to previously unnoticed economies such as the BRIC economies – Brazil, Russia, India and of course China. Leading but for How Long Currently, the United States remain as the world’s top military and economic power. It is undeniably the most advanced and sophisticated country evidenced by its powerful state of the art military as well as the sophisticated financial instruments prevalent in its economy. Kempener et al (2010) illustrates the significant gap in investments in energy research and development enjoyed by the United States over China and the other developing economies. However, towards the latter part of the last decade, there had been a significant uptick in the investments being made by China in order to get ahead of energy technology (Campbell 2011). As mentioned, the recent economic turmoil has reshaped the global economic landscape. In less than half a decade, China has overtaken advanced economies most notable Japan to place itself in second place just behind the United States. Likewise, looking at the recent economic developments namely the contrasting strong recovery of the Chinese economy and the lackluster performance of the American economy, it is possible that China can overtake the United States in the near future. Although the United States produces some of the oil it consumes, it is also its biggest consumer which fuels its massive manufacturing sector and gives power to its .3 billion citizens. However, the great recession has significantly altered the economy of the world. The downturn was so steep and has drastically affected the advanced economies that it changed the landscape of the global economy. There is a strong contrast between the rate of recovery between the advanced economies and the developing economies (IMF, WEO 2010, pp 62-70). In fact, China had even lobbied for the Renminbi (RMB) to be a recognized global currency. Though this may not be realized in the foreseeable future, the current affluence of China and the relative weakness of the United States have allowed the former to creep into the latter and even exceed it on some areas such as energy technology (Campbell 2011). Blown Away Campbell (2011) notes the high goals set by China to improve its capability to harness renewable energy. This has set off massive movements on laws, policies and incentives in order to entice possible contributors to the renewable energy build-up effort. Amongst the biggest projects of the Chinese in order to satisfy their growing appetite for energy, enormous investments have been poured into the wind energy sector. In about half a decade, the wind power of China has improved from about 0.567 gw last 2003 to over 12 gw in just after five years. Last year, the Chinese have overtaken the Americans in the wind power department by establishing more than 40 gw capacity of wind energy. And, although not all of these are in circulation within their power grid, there are already plans to further raise the bar to more than double this capacity in less than a decade. This has provided another milestone for China as these developments have helped China pledge in the Copenhagen agreement to be able to further cut back on fossil fuels (Yes po, I just adjusted it po). Apparently, the testimony of Wong (2010) had been further substantiated by these recent developments. With the relation displayed on the foregoing statements between economic prosperity and energy sustainability, China seem to be taking proactive efforts in order to pull closer to the American economy and probably even push forward ahead of the idle US power sector. It is evident that China’s efforts to catch up on the energy race have been paying off. Although quality issues remain as well as the issues on labor and on copied technologies, China has steadily crept up and has even gained ground against the United States in terms of energy technology. The foregoing wind example is a very important step for the Chinese economy in cementing their place as one of the top economies in the world. Considering the problems related to fossil fuels as well as the reality that these will run out sooner or later, the sustainability of the Chinese economy is being assured because of its increasing capability to harness renewable energy sources assuring it of a steady supply of energy to power its massive, and still growing, economy (Yes po from Wong). Clean Coal, Corn Fuel The United States and China are the most voracious consumers of coal worldwide. Jointly, these powerhouse economies accounts for over half of total consumption all over the world (Nation Master, 2011). Much of the energy demands of their economies are being met by coal especially the needs of the industrial and electrical sectors. Consequently, this has placed these countries at the top of the list of emission sources. The Copenhagen agreement as well as the various pressures from environmental groups worldwide has spawned the need to make coal usage cleaner and more efficient. The pressing need has mobilized China to explore the clean coal technology in order to deploy these to the various sectors of the Chinese economy (Zhao et al, 2008). On the other side, the United States has been aggressively exploring the use of ethanol for fuel. Despite having numerous oil platforms in the Gulf of Mexico, it remains as the biggest importer of oil. Being an established advanced industrial economy, there are significantly more automobiles in the US. Likewise, it is the country of origin of the gas guzzlers such as the Fords and Chevies. In a bid to somehow alleviate the pollution problem, the United States along with other OECD countries. Hence, bio-ethanol production is being pushed in the US to ensure that there can be alternatives to fossil fuels that are friendly to the environment (Agricultural Outlook 2008-2017 p11). Nuclear Through Westinghouse, China has further expanded its energy technology by improving its nuclear power capabilities. Last 2007, the site for new advanced nuclear power plants have already been identified (Westinghouse, 2007). Despite the significant danger poised by nuclear technology as shown in Japan’s tragedy, it is free of greenhouse emissions making it a cleaner alternative to the previous dirty coals used to power China. Hence, aside from cleaner coal, the Chinese have definitely stepped up their power generation capabilities in order to serve the growing needs of their expanding economy. This is a very important prerequisite to the sustainability of their economic growth since this ensures various industries and their investors of the capability to run their plants for their manufacturing needs. Conclusion Looking at the economies of the US and China, it is clear that the economic growth of an economy exerts substantial pressure on a country’s power producing capability. Industry led economic growth is strongly dependent on sustainable power generation. Hence, the stability of an economy rests strongly on its strong power generation capacity. The United States has long been the economic leader of the world and as such has likewise been the biggest energy consumer. During the economic crisis as well as its aftermath, the growth of the Chinese economy has been highlighted especially when it roared past Japan to take the second spot at the global economic standing. Currently, it is threatening to take away the leadership position from the United States and this does not bode well for the US economy. China has not been shy in displaying its new economic prominence and has even voiced out its desire to make the Renminbi (RMB) a global currency (Huang 2010). There have likewise been various altercations between these two economies such as the currency wars. All these point out to the growing clout by the Chinese in the world economy – and this prominent economic position is being powered by the advancements in China’s energy technology. Wong (2011) reports the massive investments of the Chinese in energy particularly those that are renewable such as wind and solar energy. Likewise, in line with the Copenhagen agreement, China has also taken steps to curb out emissions and minimize its carbon footprint – a move that has yet to be duplicated significantly by the United States. China is emerging to be a strong economic power despite the big part being played by agriculture in its economy. In recent years though, the industrial sector has considerably ramped up its input to the Chinese GDP which contributed to the exponential growth and relative stability of its economy (Wong 2010 p 4). As mentioned, these are power intensive industries that have likewise increased power demand for the emerging economic superpower. Campbell (2011) puts forward the significant increase in demand for energy by China. Hence, the massive investments in renewable energy have significantly bolstered its power sector’s capability to support its economy. More so, China has overtaken the US in renewable energy efforts. This is a very important strategy for gaining and maintaining economic prominence since the pressure from global warming and the treaties and policies that come along with it calls for the decrease in use and eventual phase out of fossil fuel dependent energy technology (Campbell 2011). Unless, the US takes considerable efforts to innovate and invigorate its renewable energy efforts, they might as well surrender the top economic spot to the Chinese. References Campbell, R. (2011). China and the United States—A comparison of green energy programs and policies. Penny Hill Press. . Retrieved on April 29, 2011 from http://www2.pennyhill.com/?p=16804 CIA World Factbook. (2011). “China People 2011”. 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